Why India Needs a New Car Policy
Subhash Chandra Agrawal 08 January 2024
The then Union environment minister Jairam Ramesh (UPA regime) had once rightly termed SUVs (sports utility vehicles)  as ‘socially useless vehicles’ misusing the diesel subsidy for the elite rich capable of purchasing these luxury vehicles. Earlier, the then Delhi chief minister Sheila Dikshit had also insisted on discouraging big cars which occupy more parking space and road traffic share. At present, India needs an altogether new car policy whereby the production of big and costly cars may be reduced. 
Rather, it is time that an improved version of auto-rickshaws with provision for air-conditioning be introduced in the market so that at least middle-class people may like to switch to such vehicles which will occupy less road and parking space apart from being eco-friendly because auto-rickshaws are now either electric-charged or have CNG (compressed natural gas) engines. It may be recalled that once a Mexican ambassador to India in Delhi preferred a private luxurious auto-rickshaw to any luxury car. 
It is beyond understanding why and how authorities and certain individuals prefer promoting car manufacture in India as if cars are basic necessities rather than a luxury. There are so many other sectors of use for commoners where production should be increased like laying down a metro network in more and more cities. Car manufacturers then can switch over to producing metro coaches for which efforts should be made to get export orders also. They can also utilise their production capacity for the manufacture of three-wheeler (3W) auto-rickshaws including with air-conditioners. 
All such steps may be taken to cut down the manufacture of costly cars. Goods and services tax (GST) along with cess, road tax, insurance premium and all other levies may be doubled on ultra-luxury cars compared with cars costing less. 
Cars must not be sold with GST subsidy through the canteen stores departments (CSD) for army-personnel.
The categorisation of cars should be based on ex-showroom price rather than length and engine capacity, including restrictions on loans for costly cars. Costlier, ultra-luxury cars are nothing but a status symbol and status-conscious persons must pay heavily for their show of status in society. 
Also, import duty on imported cars should be quite high to discourage the import of foreign-made cars. It is observed that there are tax disputes on paying import duty on imported cars gifted to Indian celebrities who are otherwise extremely rich. Complete import duty should be charged on imported cars received as gifts from foreign elements by Indians. 
The Telangana government, in 2021, was criticised, and rightly too, for the purchase of a fleet of 32 new luxury cars priced at Rs30 lakh each for use by additional collectors. The then Maharashtra government approved the purchase of six luxury cars each costing Rs22.83 lakh with a total expenditure of Rs1.37 crore for its education department during the COVID-19 period in 2020 that too with the state facing a financial crunch when the state government should have concentrated more on fighting corona. 
It is time that even the government departments and their undertakings should start using the air-conditioned auto-rickshaws, replacing cars. 
Diesel engines must not be allowed in cars of any category. With petrol and diesel having an almost same procurement price, diesel is deliberately priced lower because it is used for public transport and goods carriers. It is a misuse of lower-priced diesel to allow it to be used for cars. 
The Supreme Court-appointed environment pollution prevention control (EPPC) committee headed by Bhure Lal rightly suggested a total ban on non-CNG cars in Delhi. However, the odd-even system for plying cars, as suggested by the committee, may cause a big problem for middle-class people. The rich will purchase more cars separately registered in odd and even numbers to counter the move.
With the lack of infrastructure in the public transport system in Delhi, the best way is to remove any type of capping on the number of auto-rickshaws in Delhi in the interest of middle-class people. This will bring an adequate number of auto-rickshaws on the roads negating the usual behaviour of auto-drivers in not going according to meter-reading or refusing required destinations.
Already, US giant Ford has been compelled to discontinue the manufacture of cars due to mounting losses. The idea should be to discourage other foreign car manufacturers in India to reduce production so as to save Indian money going to foreign countries. Instead, every step should be taken to encourage the export of cars manufactured by Indian companies to other countries.
The car-scrapping policy to compulsorily abandon 10-year-old diesel cars and 15-year-old petrol cars in cities like Delhi in the name of curbing pollution is indirectly promoting the car industry in India. 
Pollution can and should be controlled by making it mandatory for each registered workshop for every type of vehicle to compulsorily install pollution-checking machines where every vehicle going out of workshops must be given a check-out with pollution certificate. Rather, such pollution-checking services and certificates should be provided free of cost by automobile workshops because it is not very costly. 
Presently, if a vehicle fails in pollution-checking at the pollution-checking-centre, then it has to be first taken to an automobile workshop, and then again driven to the pollution-checking centre with the cycle repeated until the vehicle passes the pollution-checking test. 
It should be made compulsory for each vehicle to be computerised-checked for fitness by the authorised workshops of car manufacturers every 10 years. Cars failing the tests and not fit for necessary modification can be ordered to be scrapped. 
At present, NOT Presently, compulsorily scrapping cars after ten years in respect of diesel cars and 15 years for petrol cars is very harmful especially for senior citizens sparingly using their cars. Different coloured number plates can be introduced for cars found fit for use after the initial ten years.  
Too many variants of any car model confuse customers. There may be just two variants apart from the third with automatic gears, one basic Lx for economy customers and the other Vx with all company-fitted extra accessories and luxuries for affording customers. There is no sense in having too many confusing variants like Lx, Lxi, Vx, and Vxi for the same model. 
India, being the biggest consumer market amongst nations with a free economy, certainly has the power to dictate its consumer-friendly terms for global market leaders collaborating in car manufacturing in India.
The Union government should induce the standardisation of common accessories like tyres and batteries so that the same parts may be used in different models of cars produced by various car manufacturers. It will heavily bring down the cost of consumables through their bumper production in extra large numbers in some limited sizes and specifications. It can be achieved by merging some nearing sizes and specifications. Such guidelines, though also mentioned in the auto policy of the Union government, are never followed in actual practice. 
The extraordinarily heavy prices of car spares provide a heavy profit to car manufacturers which they monopolise. A study can prove that a new car assembled from new spare parts purchased at maximum retail price will cost much more than a new car purchased from a car dealer at the ex-showroom price. The national anti-profiteering committee, under the department of revenue of the Union government, should ensure that car manufacturers may lower the prices of car spares with some reasonable margin only.
(The writer is an RTI consultant holding the Guinness World record for most letters published in newspapers.)
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